U.S. Home Seizures Reach Record as Recovery Delayed

U.S. home foreclosures climbed to a
record in April, a sign that government mortgage relief efforts
have yet to turn the tide of property seizures, according to a
report by RealtyTrac Inc.

“Right now it appears that the banks are focusing on
processing the loans already in foreclosure, and slowing down
the initiation of new foreclosure proceedings as a way of
managing inventory levels,” Rick Sharga, RealtyTrac’s executive
vice president, said in an e-mail. “We’ll probably see this
trend continue for a while.”

Bank repossessions rose to 92,432 in April, up 45 percent
from a year earlier, Irvine, California-based RealtyTrac said
today in a statement. Foreclosure filings, including default and
auction notices, fell 2 percent to 333,837. One out of every 387
households received a filing.

Unemployment of 9.9 percent and a rising percentage of
homes worth less than the mortgages on them are combining to
thwart a housing recovery, according to RealtyTrac. About 5
million delinquent loans will probably end up in the foreclosure
process in addition to the 1.2 million homes already taken back
by lenders, Sharga said.

Defaults may not peak until 2011 depending on how lenders
process them, Sharga said.

Monthly foreclosure filings will remain “at a very high
level that will not drop off in the near future,” James J. Saccacio, RealtyTrac’s chief executive officer, said in the
statement. April marked the 14th straight month that foreclosure
filings exceeded 300,000.

More than a fifth of U.S. mortgage holders owed more than
their homes were worth in the first quarter, according to
Zillow.com. The proportion rose to 23 percent from 21 percent in
the previous quarter, the Seattle-based property service said
this month.

Home prices may fall as much as 5 percent through the first
quarter of 2011, according to forecasts from IHS Global Insight
of Lexington, Massachusetts. Still, economist Patrick Newport
said foreclosures may not get much worse.

“The key thing is fewer problem loans are going into the
pipeline,” he said.

Defaults Drop

Default notices went to 103,762 properties, down 27 percent
from April 2009 -- the peak month with 142,000 -- and down 12
percent from March, RealtyTrac said.

The numbers show fewer properties entering the foreclosure
process as those that fell into delinquency earlier in the
housing crisis finished the legal cycle.

Nevada had the highest foreclosure rate for the 40th
straight month. One in every 69 households got a notice, more
than five times the national average. Bank seizures rose 57
percent from a year earlier and filings were little changed,
RealtyTrac said.

Arizona had the second-highest rate, at one in 169
households, or more than twice the U.S. average. Filings fell 1
percent from a year earlier. Florida ranked third, with one in
182 households. Filings there dropped 25 percent.

California had the fourth-highest rate, at one in 192
households, and Utah was fifth at one in 221, RealtyTrac said.
Idaho, Michigan, Illinois, Georgia and Colorado also ranked
among the 10 highest rates.

Five States

Five states accounted for more than half the total filings
in the U.S., led by California’s 69,725. That was down 28
percent from a year earlier and 25 percent from March.

Florida ranked second with 48,384 filings, down 25 percent
from April 2009 and 18 percent from March. Michigan was third at
19,173, a 77 percent increase from a year earlier.

Illinois had 18,870 filings and Nevada had 16,217.

Arizona, Georgia, Texas, Ohio and Virginia rounded out the
top 10, RealtyTrac said.

The company sells default data collected from more than
2,200 counties representing 90 percent of the U.S. population.

U.K. home repossessions declined 7.5 percent in the first
quarter as record-low interest rates helped more households meet
their payments, according to the Council of Mortgage Lenders.